In a March order, SAT had questioned a decision taken by IRDAI in a case
The Supreme Court has stayed the Securities and Appellate Tribunal's (SAT's) order in a matter pertaining to its observations on an order by the Insurance Regulatory and Development Authority of India (IRDAI).
In March 2018, SAT had asked the IRDAI to pass a fresh order in a case involving alleged financial irregularities in awarding insurance broker contract to a broking firm.
IRDAI had approached the Apex Court challenging the order.
Appeals against orders issued by capital markets regulator SEBI and the insurance regulator IRDAI are heard by SAT.
"Until further orders, there shall be a stay of the order dated 16-3-2018 passed by the Securities Appellate Tribunal, Mumbai," said the SC judgment.
The March order by SAT had directed IRDAI to entrust the matter to a competent officer other than PJ Joseph, Member (non-life) for passing a fresh order on the complaint filed by the appellant on merits and in accordance with law.
The case pertained to a company, Atkins Special Risks, incorporated in the United Kingdom and specialising in broking special risk insurance and reinsurance with core competency in marine and energy insurance.
During the years 2002 to 2012, they provided international reinsurance cover to Jagson International. They have alleged in their submission to SAT that Jagson and its officials demanded a cut from the commission earned by the appellant from 2010 onward. Atkins declined and following this the reinsurance business was given to Marsh India Insurance Brokers in 2012.
The appellant had alleged that detailed investigation by a globally reputed investigating firm showed some alleged kickbacks given to the company by the broking firm.
They (appellant) added that a complaint was filed with IRDAi in August 2015 and no action was taken. The appellant filed a writ petition in the Telangana and Andhra Pradesh High Court which was disposed of in September 2017 by directing IRDAI to consider the complaint filed by them.
However, after hearing the appellant, PJ Joseph took a decision to dispose of the complaint saying the appellant has not submitted any documentary proof, material information or evidence to support the contention.The case had attracted attention because SAT in its judgment said the impugned order passed by PJ Joseph (non-life) virtually amounts to aiding and abetting corruption in the insurance business by the regulator.
Considering the wording of the SAT order, IRDAI approached the Apex Court challenging it.